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Wedgewood Limited Partnership I. v. Township of Liberty

October 12, 2006


The opinion of the court was delivered by: Judge Algenon L. Marbley

Magistrate Judge King



This matter comes before the Court on the following motions: (1) Motion to Dismiss for Lack of Jurisdiction and/or Motion for Partial Judgment on the Pleadings by Defendants Holly C. Foust, Robert E. Cape, Kim Cellar, and John C. Werner (collectively, "Trustees"), the Township of Liberty, Ohio, located in Delaware County, Ohio ("Liberty Township"), and the Board of Trustees of Liberty Township ("Board of Trustees") (collectively, "Defendants"); and (2) Motion to Dismiss for Lack of Jurisdiction and/or for Failure to State a Claim on Which Relief Can be Granted by Intervenor Liberty Township/Powell Neighborhood Community Watch Foundation ("Intervenor"). For the reasons set forth herein, Defendants' and Intervenor's Motions are GRANTED in part and DENIED in part.


A. Background

The parties' dispute centers on the Defendants' decision to deny zoning approval for Plaintiff's proposed plan to develop a Wal-Mart Supercenter within Liberty Township. Defendants assert that they refused to issue Plaintiff a zoning permit to build the proposed Wal-Mart because the store would not comply with Liberty Township's Zoning Resolution. Plaintiff claims, however, that Defendants' decision to deny the requested zoning permit was arbitrary and capricious and violated its constitutional rights.

1. The Parties

Plaintiff, Wedgewood Limited Partnership I ("Wedgewood LP" or "Plaintiff"), owns an approximately 34-acre lot located in the "Wedgewood Commerce Center" development (the "WCC"), a 345-acre mixed-use development within Liberty Township. The lot, which is the subject of the instant suit, was platted as "lot number 2069" or "subarea 3" in the WCC Section 1 in 1994 and recorded as such in the Delaware County records. See Ex. F. In addition to owning lot number 2069, Wedgewood LP was also one of the original developers of the WCC. Defendants are Liberty Township, the Board of Trustees, and the individual board members in their capacity as Trustees.*fn2 Also, the Liberty Township/Powell Neighborhood Community Watch Foundation ("Intervenor") has intervened as a party defendant in the suit.

2. The WCC Development

In June 1991, Plaintiff and others filed an application for a Zoning Map amendment from FR-1 to Planned Commercial ("PC") to create the WCC, a proposed planned-unit development.*fn3 disapproval of subsequent use or development of property in a planned-unit development as being in compliance with regulations established as authorized by this division shall not be considered to be an amendment or supplement to a township zoning resolution for the purpose of section 519.12 of the Revised Code, but may be appealed pursuant to Chapter 2506 of the Revised Code.

On November 18, 1991, the Board of Trustees approved the re-zoning and the parties developed a planned-unit development plan (the "PUD Plan").*fn4*fn5 The PUD Plan, and all corresponding plat maps were formally combined into the "Wedgewood Commerce Center Development Standards" ("WCC Development Standards"), which was filed with the Commission on February 2, 1992. See Ex. F. Among other things, the WCC Development Standards required the establishment of an "architectural review committee" to "exercise control over the design and final planning of all phases of the development" and to ensure that the proposed structures fit shall approve the application and upon approval shall cause the zoning map to be changed so that any other zoning district that applied to the property that is the subject of the owner's application no longer applies to that property. The removal of the prior zoning district from the zoning map is a ministerial act and shall not be considered to be an amendment or supplement to a township zoning resolution for the purposes of section 519.12 of the Revised Code and may not be appealed pursuant to Chapter 2506 of the Revised Code. . .

As used in this section, "planned-unit development" means a development which is planned to integrate residential, commercial, industrial or any other use. . . .

the "rural context of Liberty Township." See Ex. F ¶ 3. Further, the WCC Development Standards provided that development would occur in five-year phases and would "proceed as market conditions dictate," estimating that it would take approximately ten to twelve years to finish the project. Id. ¶¶ 7-8.

Pursuant to the PUD Plan, lot number 2069 was zoned "Planned Commercial"*fn6 ("PC"). According to the Liberty Township Zoning Resolution in place at that time, in a Liberty Township PC zone, the developer gets to "craft its own unique zoning that applies only to that developer's parcel." See Zoning Resolution §§ 14.01, 14.06(a)-(c) (eff. May 1, 1991).*fn7 To allow for this "unique zoning," each developer's PC plan becomes part of an amendment to the Township's zoning code. See id. §§ 14.06(d) ("The Development Plan as approved by the Township Trustees shall constitute an amendment to the zoning resolution as it applies to the lands included in the approved amendment.") (emphasis added).

Over the course of the next thirteen years, in accordance with standard Liberty Township zoning procedure,*fn8 significant development occurred within the WCC. Some of this development differed from what was set forth in the PUD Plan. For instance, although the PUD Plan designated subareas 4, 5, 6, and 10 for "suburban office use" only, owners of each of these subareas sought approval for and were granted permits to build retail and/or commercial structures. Accordingly, subareas 4, 5, 6, and 10 now comprise approximately 248,000 square feet of "commercial" development, rather than the suburban office space for which they were initially zoned. Plaintiff asserts that it had no involvement or input in Liberty Township's approval of these zoning changes.

In October 2003, Plaintiff submitted an application to the Commission for six area variances, primarily from set-backs, to construct a Wal-Mart Supercenter on WCC lot number 2069. The parties do not dispute that the proposed Wal-Mart store complies with the definition of "commercial" use under the Liberty Township Zoning Resolution.*fn9 After conducting a public hearing on the matter, however, the Commission denied Plaintiff's variance applications, and Plaintiff subsequently withdrew them.

Soon after Plaintiff's variance applications were denied, the Homeowners Associations of Wedgewood, Campden Lakes, Wedgewood Hills, Falcon Ridge, Braemar, the Barringtons at

Wedgewood Villa Condominium Association, Big Bear Farms, and Grandshire,*fn10 detailed their concerns over what they deemed inconsistencies in the PUD Plan. The Board of Trustees then ordered the Zoning Inspector, Holly Foust, to "study" the history of the administration of the PUD Plan to alleviate a number of concerns over its application.

On January 19, 2004, following the Zoning Inspector's study, the Trustees issued a Public Statement (the "January 19 Instructions"), which now governs the procedural administration of the WCC by the Commission. Importantly, the January 19 Instructions concluded that the PUD Plan imposed a so-called "floating cap" of 500,000 square feet of commercial property (the "floating cap") on all development within the WCC.*fn11 Accordingly, the Board of Trustees instructed the Zoning Inspector to refrain from issuing any Zoning Certificates for additional commercial development within the WCC unless or until the PUD Plan had been modified or amended pursuant to procedures for modifications set forth in the Liberty Township Zoning Resolution. The Board of Trustees further indicated that any future applications for commercial development would be subject to a "two-step major deviation" development plan modification.*fn12

Plaintiff did not submit Zoning Applications under this heightened "major modification" process. Instead, on June 29, 2004, Plaintiff, using standard Liberty Township procedure, applied for zoning permits to build an approximately 220,598 square foot Wal-Mart Supercenter and a Murphy Oil Gas Station in subarea 3. On September 30, 2004, the Zoning Inspector denied Wedgewood LP's permit applications explaining that, in light of the January 19 Instructions, the applications: (1) failed to meet the requirements for development plans; (2) exceeded the acreage allowed under the floating cap; (3) were incomplete because they had neither been submitted for approval nor approved by the WCC architectural review committee; and (4) were inconsistent with both the Zoning Resolution and the PUD Plan.*fn13*fn14

On October 20, 2004, Plaintiff appealed the Zoning Inspector's denial to the Liberty Township BZA. At the same time, Plaintiff also submitted a revised site plan and a letter withdrawing its permit application for the Murphy Oil gas station. In its appeal, Plaintiff stated that the Zoning Inspector had acted improperly in finding its zoning permit applications incomplete. Plaintiff also stated that the Zoning Inspector had acted improperly in finding that the proposed construction would exceed the maximum square footage limitations because the January 19 Instructions, which served as the basis for the Inspector's decision, were inaccurate. Further, Plaintiff asserted that the Zoning Inspector had incorrectly stated that she could not issue a Zoning Certificate without the architectural review committee's approval as such approval had not been required in the thirteen years since the PUD Plan had been approved. Finally, Plaintiff argued that the Zoning Inspector had mistakenly deemed its applications incomplete for allegedly failing to meet variance requests.*fn15

B. Procedural History

Because Plaintiff has filed the instant federal court action in addition to filing a later suit in state court, a discussion of the procedural history of both the federal and state court proceedings is necessary.

1. State Court Proceedings

On November 5, 2004, before the BZA had ruled on Plaintiff's appeal, Plaintiff filed the instant suit claiming that Defendants' reliance on the January 19 Instructions, Defendants' modification of the Zoning Resolution, and Defendants' denial of Plaintiff's Wal-Mart zoning permit application violated Plaintiff's constitutional rights. After Plaintiff filed this action, however, administrative activity regarding Plaintiff's denied zoning permit continued in Liberty Township.

On November 16, 2004, the Liberty Township BZA conducted a public hearing on Plaintiff's appeal of the Zoning Inspector's decision. Although Plaintiff did not present any testimonial evidence at the hearing, it did present arguments concerning the content and meaning of its plans, the development of the surrounding parcels, and a history of the WCC. On January 11, 2005,*fn16 the BZA affirmed Zoning Inspector's September 30 denial of Plaintiff's permit applications. See BZA Findings of Fact and Conclusions of Law. Thereafter, on February 8, 2005, Wedgewood LP filed its Notice of Appeal from the BZA's "final decision" in state court, pursuant to Ohio Revised Code § 2506.01.*fn17

On March 28, 2005, Plaintiff filed a Motion to Supplement the Record with Additional Evidence and to Stay the Briefing of the Case Pending a Decision on this Motion. Plaintiff contended that the Board of Trustees' directive that they must approve, after public hearing, all commercial development in WCC was "improper and illegal." Plaintiff also asserted that the use of lot 2069 to build an approximately 220,000 square foot Wal-Mart store is not a deviation from the PUD Plan because in 1991, Plaintiff was originally allotted up to 220,857 square feet for commercial development. Further, Plaintiff claimed that it was not bound by the floating cap because no such cap had been set forth in the WCC Development Standards, and because it had never agreed to allot a significant percentage of the purported floating cap to the developers of subareas 4, 5, 6, and 10, who were permitted to construct commercial buildings in place of the office space set forth in the PUD Plan. On or about May 13, 2005, the state court denied Plaintiff's Motion to Supplement the Record, explaining that in failing to address its questions and concerns regarding certain documents and procedures during the BZA hearing, Plaintiff had effectively waived its right to supplement the record in the trial court.

On July 18, 2005, the parties participated in a hearing before the Court of Common Pleas for Delaware County, Ohio, addressing only two narrow issues: (1) the legal basis for the floating cap on commercial development in the WCC development; and (2) whether the PUD Plan had expired by the time Plaintiff had submitted its Wal-Mart zoning permit application. The state court noted that there was a dearth of evidence on both of the issues in question, explaining:

In this case, vital information is missing from the Liberty Township Board of Zoning Appeals ("BZA") record that was submitted to this Court. Scarce, if any, testimony or exhibits were contained within the record that resolved questions pertaining to the basis of the zoning inspector's decision to deny Wedgewood's application for a zoning certificate. Further, the record was also devoid of evidence as to the legal basis of the 500,000 square foot commercial limit imposed upon the WCC; and evidence as to the affect of the originally approved [Development P]lan for the WCC on the commercial limit.

See Wedgewood Ltd. P'ship I v. Liberty Twp. Bd. of Zoning Appeals, Case No. 05CV-F-02-101, Decision and Entry at 3 (Ohio Ct. Com. Pl.'s Sept. 22, 2005) (Whitney, J.). Accordingly, the state court remanded the matter to the Liberty Township BZA to "carry out its role as the finder of fact to determine the basis of the zoning inspector's decision, as well as provide documentation for the 500,000 square foot commercial limit [(the floating cap)] on the [WCC] Development and the affect of the original [PUD] Plan." Id. The parties have since appealed the state court's ruling and are scheduled to appear for oral argument in the coming months.

2. Federal Court Proceedings

Plaintiff's federal court Complaint asserts nine counts against Defendants. Counts one through four, which Plaintiff brings pursuant to 42 U.S.C. § 1983, state that Defendants violated Plaintiff's procedural due process, substantive due process, and equal protection rights by relying on unconstitutionally vague ordinances to deny its various applications for Zoning Permits arbitrarily, capriciously, and willfully. Particularly, Plaintiff asserts that Defendants' interpretation of the PUD Plan and the WCC Development Standards to include the floating cap on commercial development was arbitrary, capricious, irrational and discriminatory. Counts five through eight assert identical claims pursuant to Ohio law. Count nine requests a declaratory judgment.

Specifically, Plaintiff seeks the following relief: (1) a declaratory judgment that Plaintiff's proposed development is in full compliance with all Liberty Township zoning standards; (2) a declaration that Defendants' actions attempting to establish and enforce the floating cap on commercial development in the WCC are improper, impermissible, and a violation of Plaintiff's due process and equal protection rights; (3) an order enjoining Defendants from enforcing the floating cap on commercial development and the January 19 Instructions against Plaintiff; (4) an order requiring Defendants to issue Plaintiff a Zoning Certificate to develop its proposed Wal-Mart store; (5) an order enjoining Defendants from refusing to issue a Zoning Certificate for Plaintiff's proposed Wal-Mart store; (6) compensatory damages, attorney's fees, costs, and any other declarative, injunctive, or equitable relief the Court deems just and appropriate.

On May 20, 2005, the Court granted Intervenor leave to intervene as a party defendant in the suit. On August 9, 2005, this Court stayed discovery in the case pending resolution of the parties' jurisdictional motions, and denied Intervenor's Motion to Postpone Decisions on Defendants' Motion for Judgment on the Pleadings until Briefing is Concluded on the Motion to Dismiss Submitted by Intervenors. Both Defendants' Motion to Dismiss and/or Motion for Judgment on the Pleadings and Intervenors' Motion to Dismiss have been fully briefed and are now ripe for this Court's decision. Because the Court finds that Defendants' Motion contains issues that overlap with those set forth in Intervenor's Motion to Dismiss, the Court will consider the Motions in tandem.


A. Dismissal For Lack of Subject Matter Jurisdiction

Where a defendant raises the issue of lack of subject matter jurisdiction pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure, the plaintiff has the burden of proving jurisdiction in order to survive the motion to dismiss. DXL, Inc. v. Kentucky, 381 F.3d 511, 516 (6th Cir. 2004); Moir ...

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